eBay will soon prohibit sellers from blocking echeck payments funded through PayPal. An echeck is an electronic funds transfer that withdraws money directly from the sender's bank account. According to the PayPal website, "It's just like writing a check, only it is done electronically." Beginning May 7, eBay sellers will no longer be able to block echecks.
Most odd about the policy change is that, as far as I can see, eBay has not yet announced it other than mentioning it in this one discussion thread.
Sellers have been inclined to block echeck payments because it takes days for payment to show up in their account - so buyers don't like it either, because it takes longer for them to get their items!
According to the PayPal website, it takes up to 4 business days for electronic funds transfers to complete and for the funds to become available to recipients when using a US bank account, up to 8 days for Canadian bank accounts, up to 9 days for UK bank accounts, and 7-8 days for Australian bank accounts. The recipient (seller)'s balance does not reflect echeck payments until the funds transfer is complete.
In the latest Town Hall meeting, an eBay buyer wanted to know why it was suddenly taking a long time for PayPal payments to go through, whereas in the past, payment was instantaneous. The moderator said it was likely because his balance had gotten low and PayPal was sending echeck payments, which take longer. I found it surprising the buyer had no idea that this was going on! (Town Hall meeting transcript from April 17 not yet available.)
According to a thread on an eBay discussion board, eBay will be changing the messaging that buyers see when making payments. Monroe told a PayPal moderator that they had allowed sellers to block eChecks because "sellers and buyers alike expressed their concern that eCheck payments lead to shipping delays, general confusion around the experience, and ultimately negative feedback." He continued:
Soon, however, we will be implementing improvements to the eCheck experience designed to alleviate exactly those concerns. The changes being made will improve buyer expectations with regards to shipping dates. The changes will provide improved messaging during the eCheck payment flow, in the transaction details for both buyers and sellers, and in our email communications. These changes will provide buyers with a better understanding of the process and will clearly call buyers' and sellers' attention to the eCheck clearing date.
This is significant. With sellers being rated on shipping delivery times, this could add another friction point between buyers and sellers that could lead to lower DSR ratings, which influence how listings are ranked in search results on eBay. While Monroe said eBay would make changes to improve buyer expectations about echecks and delivery times, it's pretty likely buyers are going to make sellers accountable for shipping delays, no matter the reason.
It's interesting to note how PayPal funds eBay transactions - in this order: Balance; Instant Transfer from bank account; PayPal Credit; Credit card or debit card; and eCheck. ("If you don't want to use your Balance, you can withdraw it before making a payment.").
PayPal users may change their default preferences, but, PayPal "will use your Balance before your Preferred Funding Source, unless you choose PayPal Credit or eCheck."
It is also interesting to note that PayPal's User Agreement still states, "eCheck is the only Funding Source that eBay Sellers are allowed to block."
Some clarity on echecks from eBay would be welcome.
